Get on the Highway and kep Off the Roundabouts!
The idea of creating wealth through real estate investing is appealing for most people, but finance can be the stumbling block for the majority and they can’t see a way around it.
If you are eager to begin investing, or have been investing but now face a road block, then you need to understand there IS a way around it.
There are 3 areas that are commonly misunderstood, and can prevent the average person from building an investment portfolio:
1) The Lender.
Many people think that a bank is the only source of property financing. In actual fact the banks are only one avenue for raising money to invest with. There is a whole other world of finance besides the banks. Conventional finance can sometimes stop you from going further, but there are numerous alternative property financing strategies available to you for real estate investing.
2) The deposit.
Most people think that you need a cash deposit of 20% or more to buy a property but if you have a reliable income and clean credit history, there are several ways you can buy real estate, even if you have minimal, or NO cash.
3) Debt.
Most people are afraid of debt, but they don’t understand the difference between good debt and bad debt.
The average person only ever uses bad debt, which is money borrowed to buy depreciating items. These are things like cars, TV’s, furniture and holidays, whereas good debt is the use of borrowed money to purchase items that appreciate, or go up in value, like houses and shares. This kind of debt needs to be kept to a minimum.
In actual fact, you may feel that the debt on your family home is a good debt, and yes that may be true. However, although the property may increase in value, the debt is not tax deductible.
The most effective form of debt that can rapidly grow your net wealth is when borrowing to purchase appreciating assets. The debt on these kinds of payments is fully tax deductible, and can be a highly effective way to help you eventually achieve complete financial freedom using real estate investing wisely.
Regards
John Brierley
Contact me at unique63@tpg.com.au
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I usually get bored easily and close the tab but i think that your blog can be an exception. Cheers !
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